U.S. stocks pushed higher Wednesday, with the Dow rising for the fifth straight trading session to close at a new record high after a string of upbeat economic reports.

The Dow Jones Industrial Average rose 0.2% to close at 16,097.2. The S&P 500 index tacked on 0.3% to close at 1,807.2.

And the Nasdaq Composite rose 0.7% to end at 4,044.75.

Technology stocks performed well on Wednesday. Former Dow component Hewlett-Packard (HPQ) rallied after a better-than-expected earnings report. International Business Machines (IBM) led gainers in the Dow industrials.

Still, it was a string of economic reports that sent the indicies higher, including better-than-expecetd data on jobless claims, manufacturing in the Midwest and consumer confidence.

U.S. stock markets will remain closed Thursday for the Thanksgiving holiday, and close early — 1 p.m. EST – on Friday.

Earlier today, October orders for durable goods fell by 2%.

Consumer confidence was stronger than expected in November. The final reading of the Thomson-Reuters/University of Michigan consumer sentiment index for the month was revised up to 75.1, above the projected 73.5. The Conference Board’s index of leading economic indicators rose 0.2%, while it was expected to remain unchanged.

The ISM’s Chicago-area purchasing managers’ index slipped to 63.0 in November, while a decline to 60.0 was expected. Earlier, the Department of Labor reported there were 316,000 initial claims for unemployment benefits in the latest week, fewer than the 330,000 expected.

Looking ahead, investors are focused on the December meeting of the Federal Reserve. The central bank has said it could start to pare back those policies in coming months, but that the decision will depend on economic data.

The yield on the 10-year Treasury note rose to 2.739% from 2.696% late Tuesday.

Meanwhile, gold futures fell, while the dollar edged lower against the euro and rose against the yen.

In other corporate news, Time Warner Cable (TWC) edged higher after The Wall Street Journal reported yesterday that Cox Communications is considering jumping into the bidding for the second-largest cable operator.

Charter Communications (CHTR) and Comcast (CMCSA) are each also contemplating bids. The WSJ reported late today that Charter is arranging $25 billionin debt to fund its bid.

Shares of Charter and Comcast fell 0.9% and 0.3% respectively.

A federal judge cleared the way for AMR (AAMRQ) to exit bankruptcy, clearing the way for a merger between American Airlines (owned by AMR) and U.S. Airways Group (LCC). AMR and U.S. Airlines rose 2.7% and 0.6% respectively.

CVS Caremark (CVS) rose 1% to $66.77 after it said it would buy medical provider Coram LLC to continue its push into the specialty-drug market.

Shares of both US Airways (LCC) and American Airlines parent AMR (AAMRQ) were moving early Friday as the two began merger talks.

The two companies today announced that they had entered into a non-disclosure agreement, allowing the firms to exchange confidential information as they explore a possible merger.

The airlines said they won’t provide more details until they have either agreed on a merger or broken off talks, and will not engage in merger talks with any other parties during the process.

There have been rumors that AMR, which filed for bankruptcy last November, has been looking exit the process with a partner.Bloomberg had previously reported that US Airways, Alaska Air Group (ALK), Frontier Airlines and Virgin America had received nondisclosure agreements. Others, like JetBlue (JBLU), have openly dismissed the option.

Reports on Thursday that the biggest unions representing workers at American-Airlines parent AMR (AAMRQ) had reached a deal to support a takeover bid by US Airways (LCC) sent shares up 16%. Unnamed sources had told Bloomberg about the deal; the unions didn’t comment on it.

On Friday, the AMR unions confirmed that they had made a tentative labor deal with US Airways, claiming it could save 6,2000 jobs that would be cut by AMR if no deal is made.

US Airways shares are down 3.3% this morning, worse than the rest of the sector.

AMR’s biggest unions will support US Airways’ (LCC) bid to buy the bankrupt airline AMR rather than stay independent, Bloomberg reported today, citing people familiar with the matter.

US Airways has been talking to unions about the possibility of a takeover, reportedly arguing that the unions would be better off in a takeover rather than fighting AMR (parent of American Airlines) through bankruptcy court. AMR (AAMRQ) plans to ask a judge to void union contracts as the company prepares to lay off 13,000 people as part of its restructuring.

AMR CEO Tom Horton sent a letter to employees earlier today warning them about “misleading information” related to the airline.

US Airways shares jumped 16% on Thursday, with most of the gains coming after the union news leaked out.

Of course, it’s still unclear that unions would fare much better under US Airways, notes Maxim analyst Ray Neidl.

“Our take is that US Airways cannot offer too much since we believe all of the cost cutting in the AMR plan is needed for the carrier to be competitive; however, AMR unions may be more willing to work with a new management,” he wrote.

And while a merger would be positive, US Airways shares could slip in the short term, Neidl warns.

“A combination of the two carriers would be positive for both of them and the industry in our opinion, but we believe that such a move by next week is too early and that there may be a short-term pullback in the stock price once things settle down.”

The big airlines should post significant earnings growth in 2012, writes Maxim Group analyst Ray Neidl. The airlines have already pushed through two ticket price increases this year, and as long as airlines keep capacity tight and fuel costs don’t escalate much, the skies look bright. In fact Neidl sees the major carriers earning a combined $6 billion this year, up from $3.5 billion in 2011.

That said, the smart money in the short term could be with the smaller niche carriers, which are “not trying to be all things to all customers.” Neidl likes Allegiant Travel (ALGT), Alaska Air Group (ALK), Hawaiian Airlines (HA), and Spirit Airlines (SAVE).

He thinks the legacy airlines will reward investors down the road: “Longer term (when we expect economic activity to pickup worldwide and the industry returns to more normal growth patterns), we believe that the restructured U.S. legacy airlines will be in a position to benefit; at what we consider to be today’s low market valuation, their stock prices should be propelled.

And he warns investors to stay away from the equity of AMR (AAMRQ), the bankrupt parent company of American Airlines. “The easy thing to predict is that current equity holders will be wiped out based upon our knowledge of previous airlines bankruptcies. We also believe that AMR will successfully restructure, not as a low-cost airline, but as a cost-competitive entity compared to Delta (DAL) and United Continental (UAL) .”

About Stocks To Watch

Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.